Deutsche Telekom's T-Mobile USA and MetroPCS Communications have signed an agreement to merge in a deal that will see MetroPCS shareholders receive $1.5 billion in cash and 26 percent of the new company.

The combined company will retain the T-Mobile name, and will be able to compete better with the other national U.S. wireless carriers thanks to expanded scale, more spectrum and financial resources, the two operators said in a statement.